FOREIGN REGISTER OF MEMBERS AND SECURITIES HOLDERS

According to sub – section (4) of Section 88 of the Companies Act 2013 a company may also have a Foreign Register which contain names and particulars of members, debenture – holders, other security holders or beneficial owners residing outside India. This may include a register maintained by a depository outside India containing details of beneficial owners in case of global or other depository issues.

A company which has share capital or which has issued debentures or any other security may, if so authorised by its articles, keep in any country outside India, a part of the register of members or as the case may be, of debenture holders or of any other security holders or of beneficial owners, resident in that country. [Sub – Rule (1)]

The Register may be referred as Foreign Register as rules also prefer to say so.

The Foreign Register is optional. Once company decides to keep, it shall follow all the rules related to foreign register.

The company shall, within thirty days from the date of the opening of any foreign register, file with the Registrar notice of the situation of the office in Form MGT – 3 along with the fee where such register is kept. In the event of any change in the situation of such office or of its discontinuance, the company shall, within thirty days from the date of such change or discontinuance, file notice in Form MGT – 3 with the Registrar of such change or discontinuance. [Sub – Rule (2)]

A foreign register shall be deemed to be part of the company’s register (hereafter in this rule referred to as the “Principal Register“) of members or of debenture holders or of any other security holders or beneficial owners, as the case may be. [Sub – Rule (3)]

The foreign register shall be maintained in the same format as the principal register. [Sub – Rule (4)]

A foreign register shall be open to inspection and may be closed, and extracts may be taken there from and copies thereof may be required, in the same manner, mutatis mutandis, as is applicable to the principal register, except that the advertisement before closing the register shall be inserted in at least two newspapers circulating in the place wherein the foreign register is kept. [Sub – Rule (5)]

If a foreign register is kept by a company in any country outside India, the decision of the appropriate competent authority in regard to the rectification of the register shall be binding. [Sub – Rule (6)]

The Term appropriate competent authority has not been defined in the Rules or in the Act. The authority under the local law of the place where the foreign register was kept shall be competent authority at first instant, unless particular jurisdiction was barred under the Act itself.

Entries in the foreign register maintained under sub-section (4) of section 88 shall be made simultaneously after the Board of Directors or its duly constituted committee approves the allotment or transfer of shares, debentures or any other securities, as the case may be. [Sub – Rule (7)]

(a) transmit to its registered office in India a copy of every entry in any foreign register within fifteen days after the entry is made; and

(b) keep at such office a Duplicate Register of every foreign register duly entered up from time to time. [Sub – Rule (8)]

Every such duplicate register shall, for all the purposes of this Act, be deemed to be part of the principal register. [Sub – Rule (9)]

With respect to duplicate registers, the shares or as the case may be, debentures or any other security, registered in any foreign register shall be distinguished from the shares or as the case may be, debentures or any other security, registered in the principal register and in every other foreign register. No transaction with respect to any shares or as the case may be, debentures or any other security, registered in a foreign register shall, during the continuance of that registration, be registered in any other register. [Sub – rule (10)]

When a company maintains duplicate register for a foreign register, no relevant entry shall be made in principal register, once it is made in duplicate register which shall be deemed to be part of principal register.

The company may discontinue the keeping of any foreign register; and thereupon all entries in that register shall be transferred to some other foreign register kept by the company outside India or to the principal register. [Sub – Rule (11)]

In such case, the company shall follow sub – rule (2).

FORM MGT – 3:

Surprisingly, this is not an electronic form but a physical one. Relevant contents are:

This notice is in respect of:

Situation of office where foreign register is kept

Change of situation of office where foreign register is kept

Discontinuance of maintenance of foreign register

Foreign register relates to

Register of members

Register of debenture holders

Register of other security holders

Register of Beneficial owners

Part A: Notice of situation of office where foreign register is kept

The Address of the situation of the office where foreign register is kept shall be given.

Part B: Notice of change of situation where foreign register is kept

Existing situation of the office where the foreign register is kept

Purpose for changing such office:

New Address of the office where the foreign register shall be kept with effect from……… (date)

Part C: Notice of discontinuance of maintenance of foreign register

Existing situation of the office where the foreign register is kept

Reason for such discontinuance:

A notice:

Notice is hereby given that the foreign register is discontinued to be maintained at the existing situation with effect from……….. and all the entries in the said register is transferred to Another foreign register maintained at……… or to The principal register.

Please note: I welcome your comments and feedback. This blog post is not a professional advice. Readers may share this post on social media by using buttons given here.

Writer of this blog, Aishwarya Mohan Gahrana is Practicing Company Secretary and Insolvency Professional working with M/s Aishwarya M Gahrana & Associates, a New Delhi based peer reviewed firm of company secretaries having pan India presence through friends and associates. This blog is a knowledge sharing initiative. Views expressed here is of writer; not of the organization(s) he is working with.